§ Mr. Richard Ryderasked the Secretary of State for Defence whether he will list measures to encourage competition being considered by his Department.
§ Mr. LeeThe Ministry of Defence is implementing a major drive to promote competition wherever practicable and reasonable across the full range of its activities.
In procurement, instructions have been issued to staff to achieve this in the following ways. We shall be making clear to contractors that we expect them to exercise competition to the maximum extent possible not only in negotiating their subcontracts but also in determining whether the work should be done inhouse or by a specialist outside contractor. We shall expect prime contractors as a matter of course to set out for us the steps they have taken to secure competitive prices for sub-components of the main contract.
Having regard always for value for money we will use competition as much as possible at the early stages of projects to ensure that we have the best available choice of concepts to consider and to stimulate innovative ideas for meeting our requirements.
The arguments for giving development contractors the initial tranche of production requirements will be carefully assessed at an appropiately senior level before any such commitment is accepted in the development contract. The objective will be to secure a competitive situation wherever possible.
The staff levels at which authority is given to proceed on a non-competitive basis have been raised and the reasons for not going to competition will be formally recorded to ensure that automatic allocation to the previous contractor does not take place.
The results of these processes will be closely monitored by Ministers. We are also phasing out formal preferred source policies and are taking steps to increase the opportunities for smaller firms to compete for our business.
Competition will also be rigorously pursued in the areas of support, supply and maintenance services, on the principle that only work which is necessary for operational 506W reasons, or where there is advantage to the taxpayer, should be carried out within the Ministry of Defence. Competition will be progressively extended in ship refitting, supply arrangements for non-warlike stores, aircraft servicing, Army equipment repair and movements.
Further details of these measures will be published in due course in the "Statement on Defence Estimates".